The SEAB Shale Gas Production Subcommittee Ninety-Day Report – August 18, 2011

081811_90_day_report_final.pdf (application/pdf Object).

The SEAB Shale Gas Production Subcommittee
Ninety-Day Report – August 18, 2011
Executive Summary
The Shale Gas Subcommittee of the Secretary of Energy Advisory Board is charged with
identifying measures that can be taken to reduce the environmental impact and improve
the safety of shale gas production.
Natural gas is a cornerstone of the U.S. economy, providing a quarter of the country’s
total energy. Owing to breakthroughs in technology, production from shale formations
has gone from a negligible amount just a few years ago to being almost 30 percent of
total U.S. natural gas production. This has brought lower prices, domestic jobs, and the
prospect of enhanced national security due to the potential of substantial production
growth. But the growth has also brought questions about whether both current and
future production can be done in an environmentally sound fashion that meets the needs
of public trust.
This 90-day report presents recommendations that if implemented will reduce the
environmental impacts from shale gas production. The Subcommittee stresses the
importance of a process of continuous improvement in the various aspects of shale gas
production that relies on best practices and is tied to measurement and disclosure.
While many companies are following such a process, much-broader and more extensive
adoption is warranted. The approach benefits all parties in shale gas production:
regulators will have more complete and accurate information; industry will achieve more
efficient operations; and the public will see continuous, measurable improvement in
shale gas activities.
A list of the Subcommittee’s findings and recommendations follows.
o Improve public information about shale gas operations: Create a portal for
access to a wide range of public information on shale gas development, to
include current data available from state and federal regulatory agencies. The
portal should be open to the public for use to study and analyze shale gas
operations and results.
SEAB Shale Gas Production Subcommittee – 90-Day Report
2
o Improve communication among state and federal regulators: Provide continuing
annual support to STRONGER (the State Review of Oil and Natural Gas
Environmental Regulation) and to the Ground Water Protection Council for
expansion of the Risk Based Data Management System and similar projects that
can be extended to all phases of shale gas development.
o Improve air quality: Measures should be taken to reduce emissions of air
pollutants, ozone precursors, and methane as quickly as practicable. The
Subcommittee supports adoption of rigorous standards for new and existing
sources of methane, air toxics, ozone precursors and other air pollutants from
shale gas operations. The Subcommittee recommends:
(1) Enlisting a subset of producers in different basins to design and rapidly
implement measurement systems to collect comprehensive methane and other
air emissions data from shale gas operations and make these data publically
available;
(2) Immediately launching a federal interagency planning effort to acquire data
and analyze the overall greenhouse gas footprint of shale gas operations through
out the lifecycle of natural gas use in comparison to other fuels; and
(3) Encouraging shale-gas production companies and regulators to expand
immediately efforts to reduce air emissions using proven technologies and
practices.
o Protection of water quality: The Subcommittee urges adoption of a systems
approach to water management based on consistent measurement and public
disclosure of the flow and composition of water at every stage of the shale gas
production process. The Subcommittee recommends the following actions by
shale gas companies and regulators – to the extent that such actions have not
already been undertaken by particular companies and regulatory agencies:
(1) Measure and publicly report the composition of water stocks and flow
throughout the fracturing and clean-up process.
(2) Manifest all transfers of water among different locations.
(3) Adopt best practices in well development and construction, especially
casing, cementing, and pressure management. Pressure testing of cemented
casing and state-of-the-art cement bond logs should be used to confirm
formation isolation. Microseismic surveys should be carried out to assure that
hydraulic fracture growth is limited to the gas producing
formations. Regulations and inspections are needed to confirm that operators
SEAB Shale Gas Production Subcommittee – 90-Day Report
3
have taken prompt action to repair defective cementing jobs. The regulation
of shale gas development should include inspections at safety-critical stages
of well construction and hydraulic fracturing.
(4) Additional field studies on possible methane leakage from shale gas wells
to water reservoirs.
(5) Adopt requirements for background water quality measurements (e.g.,
existing methane levels in nearby water wells prior to drilling for gas) and
report in advance of shale gas production activity.
(6) Agencies should review field experience and modernize rules and
enforcement practices to ensure protection of drinking and surface waters.
o Disclosure of fracturing fluid composition: The Subcommittee shares the
prevailing view that the risk of fracturing fluid leakage into drinking water sources
through fractures made in deep shale reservoirs is remote. Nevertheless the
Subcommittee believes there is no economic or technical reason to prevent
public disclosure of all chemicals in fracturing fluids, with an exception for
genuinely proprietary information. While companies and regulators are moving in
this direction, progress needs to be accelerated in light of public concern.
o Reduction in the use of diesel fuel: The Subcommittee believes there is no
technical or economic reason to use diesel in shale gas production and
recommends reducing the use of diesel engines for surface power in favor of
natural gas engines or electricity where available.
o Managing short-term and cumulative impacts on communities, land use, wildlife,
and ecologies. Each relevant jurisdiction should pay greater attention to the
combination of impacts from multiple drilling, production and delivery activities
(e.g., impacts on air quality, traffic on roads, noise, visual pollution), and make
efforts to plan for shale development impacts on a regional scale. Possible
mechanisms include:
(1) Use of multi-well drilling pads to minimize transport traffic and need for
new road construction.
(2) Evaluation of water use at the scale of affected watersheds.
(3) Formal notification by regulated entities of anticipated environmental and
community impacts.
SEAB Shale Gas Production Subcommittee – 90-Day Report
4
(4) Preservation of unique and/or sensitive areas as off-limits to drilling and
support infrastructure as determined through an appropriate science-based
process.
(5) Undertaking science-based characterization of important landscapes,
habitats and corridors to inform planning, prevention, mitigation and
reclamation of surface impacts.
(6) Establishment of effective field monitoring and enforcement to inform ongoing
assessment of cumulative community and land use impacts.
The process for addressing these issues must afford opportunities for affected
communities to participate and respect for the rights of surface and mineral rights
owners.
o Organizing for best practice: The Subcommittee believes the creation of a shale
gas industry production organization dedicated to continuous improvement of
best practice, defined as improvements in techniques and methods that rely on
measurement and field experience, is needed to improve operational and
environmental outcomes. The Subcommittee favors a national approach
including regional mechanisms that recognize differences in geology, land use,
water resources, and regulation. The Subcommittee is aware that several
different models for such efforts are under discussion and the Subcommittee will
monitor progress during its next ninety days. The Subcommittee has identified
several activities that deserve priority attention for developing best practices:
Air: (a) Reduction of pollutants and methane emissions from all shale gas
production/delivery activity. (b) Establishment of an emission
measurement and reporting system at various points in the production
chain.
Water: (a) Well completion – casing and cementing including use of
cement bond and other completion logging tools. (b) Minimizing water use
and limiting vertical fracture growth.
o Research and Development needs. The public should expect significant
technical advances associated with shale gas production that will significantly
improve the efficiency of shale gas production and that will reduce environmental
impact. The move from single well to multiple-well pad drilling is one clear
example. Given the economic incentive for technical advances, much of the R&D
will be performed by the oil and gas industry. Nevertheless the federal
government has a role especially in basic R&D, environment protection, and
SEAB Shale Gas Production Subcommittee – 90-Day Report
5
safety. The current level of federal support for unconventional gas R&D is small,
and the Subcommittee recommends that the Administration and the Congress
set an appropriate mission for R&D and level funding.
The Subcommittee believes that these recommendations, combined with a continuing
focus on and clear commitment to measurable progress in implementation of best
practices based on technical innovation and field experience, represent important steps
toward meeting public concerns and ensuring that the nation’s resources are responsibly
being responsibly developed.

Foreign Ownership in Marcellus Shale

The development of unconventional natural gas in the US is NOT by American companies, but it is a joint venture with foreign countries like China, India, Norway, the UK, Japan, and South Korea.


https://spreadsheets.google.com/spreadsheet/ccc?key=0AttP1cRHZ8J_dGc1SFp4OHlEQ3UtVVl2UDlLYkxxM3c&authkey=CMP4r_QI&hl=en_US#gid=0

In other words, even if we reduce our dependency on foreign oil [which we won’t because oil and gas are not totally interchangeable as a fuel source], we will then become dependent on foreign owned natural gas.
These companies that are drilling in PA and elsewhere in the US are multinational corporations that hold no allegiance to the US, the American people, or the American economy. They only serve their shareholders and their corporate ‘bottom line’, not the interests of the American people. There’s nothing patriotic about them. We will ultimately end up buying American natural gas from foreign entities on the global market and competing with the highest bidder.
When these companies talk about increasing the wealth, they’re talking about their’s and their international shareholders, not your’s, and not America’s.
If we want to achieve true energy independence, and do what’s right for our economy, provide real permanent American jobs, and be truly patriotic, we need, as Americans, to invest in clean, renewable, and sustainable energy sources. Solar, photovoltaic solar, geothermal, wind turbines, hydro-turbines, and bio-methane will provide permanent American jobs in manufacturing, service & installation, and technological research and developement, and move towards eliminating fossil fuels while protecting the environment, public health and safety, and preserve our other natural resources like pure water and clean air for our children and our children’s children.
I ask you… what is more reasonable, more responsible, and more patriotic than that?
Besides, we have the technology, we have the land, we have the wind, and we have the work force. The only thing we don’t have is the political will, and we can change that by speaking up and demanding better representation, and by voting. As I’ve said before, you may not be able to change stupid or greedy, but you can vote it out!
The oil & gas industry has tried to tell us that: hydraulic fracturing is safe for the environment, you will become wealthy by leasing [ie: selling your subsurface real estate] your land, this will move the US toward energy independence, and it’s the patriotic thing to do. All of which has proven to be, at best misleading, if not outright lies.
Pass this on if you agree.
John Trallo

Pipe Dreams | Food & Water Watch

Pipe Dreams | Food & Water Watch.

Pipe Dreams: What the Gas Industry Doesn’t Want you to Know about Fracking and U.S. Energy Independence is available here:

http://www.foodandwaterwatch.org/briefs/pipe-dreams/

August 4, 2011

FOR IMMEDIATE RELEASE

Contact: Kate Fried, Food & Water Watch, (202) 683-4905
Eric Weltman, Food & Water Watch, (718) 943-9085

Shaky U.S. Economy Won’t Benefit from Natural Gas Expansion
Food & Water Watch Analysis Reveals Industry Plans to Send Fracked
Gas and Profits Overseas

Washington, D.C.—As the federal government prepares to gut key programs to protect water and other natural resources through this week’s debt agreement, the Department of Energy (DOE) has announced plans to invest $12.4 million on programs to support shale gas development. Yet new analysis released today by the national consumer advocacy group Food & Water Watch casts additional doubt on the benefits of natural gas obtained through hydraulic fracturing. Pipe Dreams: What the Gas Industry Doesn’t Want you to Know about Fracking and U.S. Energy Independence shows that gas leases are not only generating less energy than once forecast, but also a significant portion of U.S. fracked gas will be exported overseas and the industry’s revenues will benefit foreign economies.

According to recent trade publication accounts, DOE will invest $1.6 million, outspending General Electric 4 to 1, on a project designed to remove radioactive material from wastewater from fracking operations in New York State. It will spend additional funds on projects to improve natural gas well performance in Colorado, Texas, California and New Mexico.

In July, New York Governor Andrew Cuomo lifted a moratorium on fracking, and the state’s Department of Environmental Conservation has recommended opening up 85 percent of the Marcellus Shale in New York to gas fracking. A coalition of 49 groups has come out in support of a ban on fracking in New York.

“This new analysis provides further evidence that fracking will endanger New York’s water for the benefit of foreign interests and customers,” said Eric Weltman, Food & Water Watch’s senior organizer in New York. “Governor Cuomo needs to read this report, which effectively undermines the natural gas industry’s claims that fracking will promote energy independence.”

While U.S. natural gas consumption is actually expected to decline through 2015, it is expected to increase overseas—as much as 44 percent by 2035, with China and India leading that demand. Liquefied natural gas (LNG) facilities once conceptualized for importing gas are now being converted to export terminals to feed the Chinese and Indian markets; Chesapeake Energy is exploring selling some of its natural gas to the India-based Cheniere Energy. Included in this plan is a liquefaction plant in the Gulf of Mexico. Natural gas from the U.S. is attractive to foreign markets because it is less expensive than that from Asia.

As U.S. companies sell or lease their own holdings, many international players are increasing their share of the U.S. natural gas market:

•       Reliance Industries (India): In 2010 announced the purchase of a 40 percent stake in Atlas Energy’s Marcellus Shale operation for $1.7 billion; also acquired a 45 percent stake in Eagle Ford shale from Pioneer Natural Resources for $1.36 billion, including $210 million to Pioneer’s other partner Newpek LLC, a subsidiary of Mexican company ALFA SAB de CV.

 

•       China National Offshore Oil Corp (China, government-owned): Agreed to pay $2.2 billion for access to a shale play in south Texas in October 2010; agreed to pay $570 million in cash for a third of Chesapeake’s Niobrara shale basin in Colorado and Wyoming in January 2011.
•       BP (United Kingdom): In 2008, invested more than $3.6 billion in U.S. shale, including $1.9 billion for 25 percent of Chesapeake’s Fayetteville shale operations and $1.75 billion for all of Chesapeake’s Woodford Shale operations in Oklahoma.

 

•       Royal Dutch Shell (Netherlands): Paid $4.7 billion for East Resources and its Marcellus Shale assets in 2010.

 

After rising and falling in 2008, natural gas prices plateaued in 2010 and have remained steady since. Moreover, many gas wells are producing less gas than once expected, and some U.S.-based companies such as Chesapeake Energy have resorted to selling the land their wells are situated on as a means of generating revenues.

Further adding to doubts of the natural gas industry’s ability to generate ample energy, news surfaced earlier this week that the Security and Exchange Commission (SEC) is investigating the accuracy of the industry’s claims regarding the performance of shale gas wells.

Pipe Dreams: What the Gas Industry Doesn’t Want you to Know about Fracking and U.S. Energy Independence is available here: August 4, 2011

FOR IMMEDIATE RELEASE

Contact: Kate Fried, Food & Water Watch, (202) 683-4905
Eric Weltman, Food & Water Watch, (718) 943-9085

Shaky U.S. Economy Won’t Benefit from Natural Gas Expansion
Food & Water Watch Analysis Reveals Industry Plans to Send Fracked
Gas and Profits Overseas

Washington, D.C.—As the federal government prepares to gut key programs to protect water and other natural resources through this week’s debt agreement, the Department of Energy (DOE) has announced plans to invest $12.4 million on programs to support shale gas development. Yet new analysis released today by the national consumer advocacy group Food & Water Watch casts additional doubt on the benefits of natural gas obtained through hydraulic fracturing. Pipe Dreams: What the Gas Industry Doesn’t Want you to Know about Fracking and U.S. Energy Independence shows that gas leases are not only generating less energy than once forecast, but also a significant portion of U.S. fracked gas will be exported overseas and the industry’s revenues will benefit foreign economies.

According to recent trade publication accounts, DOE will invest $1.6 million, outspending General Electric 4 to 1, on a project designed to remove radioactive material from wastewater from fracking operations in New York State. It will spend additional funds on projects to improve natural gas well performance in Colorado, Texas, California and New Mexico.

In July, New York Governor Andrew Cuomo lifted a moratorium on fracking, and the state’s Department of Environmental Conservation has recommended opening up 85 percent of the Marcellus Shale in New York to gas fracking. A coalition of 49 groups has come out in support of a ban on fracking in New York.

“This new analysis provides further evidence that fracking will endanger New York’s water for the benefit of foreign interests and customers,” said Eric Weltman, Food & Water Watch’s senior organizer in New York. “Governor Cuomo needs to read this report, which effectively undermines the natural gas industry’s claims that fracking will promote energy independence.”

While U.S. natural gas consumption is actually expected to decline through 2015, it is expected to increase overseas—as much as 44 percent by 2035, with China and India leading that demand. Liquefied natural gas (LNG) facilities once conceptualized for importing gas are now being converted to export terminals to feed the Chinese and Indian markets; Chesapeake Energy is exploring selling some of its natural gas to the India-based Cheniere Energy. Included in this plan is a liquefaction plant in the Gulf of Mexico. Natural gas from the U.S. is attractive to foreign markets because it is less expensive than that from Asia.

As U.S. companies sell or lease their own holdings, many international players are increasing their share of the U.S. natural gas market:

•       Reliance Industries (India): In 2010 announced the purchase of a 40 percent stake in Atlas Energy’s Marcellus Shale operation for $1.7 billion; also acquired a 45 percent stake in Eagle Ford shale from Pioneer Natural Resources for $1.36 billion, including $210 million to Pioneer’s other partner Newpek LLC, a subsidiary of Mexican company ALFA SAB de CV.

 

•       China National Offshore Oil Corp (China, government-owned): Agreed to pay $2.2 billion for access to a shale play in south Texas in October 2010; agreed to pay $570 million in cash for a third of Chesapeake’s Niobrara shale basin in Colorado and Wyoming in January 2011.
•       BP (United Kingdom): In 2008, invested more than $3.6 billion in U.S. shale, including $1.9 billion for 25 percent of Chesapeake’s Fayetteville shale operations and $1.75 billion for all of Chesapeake’s Woodford Shale operations in Oklahoma.

 

•       Royal Dutch Shell (Netherlands): Paid $4.7 billion for East Resources and its Marcellus Shale assets in 2010.

 

After rising and falling in 2008, natural gas prices plateaued in 2010 and have remained steady since. Moreover, many gas wells are producing less gas than once expected, and some U.S.-based companies such as Chesapeake Energy have resorted to selling the land their wells are situated on as a means of generating revenues.

Further adding to doubts of the natural gas industry’s ability to generate ample energy, news surfaced earlier this week that the Security and Exchange Commission (SEC) is investigating the accuracy of the industry’s claims regarding the performance of shale gas wells.

Pipe Dreams: What the Gas Industry Doesn’t Want you to Know about Fracking and U.S. Energy Independence is available here: http://www.foodandwaterwatch.org/briefs/pipe-dreams/

Food & Water Watch works to ensure the food, water and fish we consume is safe, accessible and sustainable. So we can all enjoy and trust in what we eat and drink, we help people take charge of where their food comes from, keep clean, affordable, public tap water flowing freely to our homes, protect the environmental quality of oceans, force government to do its job protecting citizens, and educate about the importance of keeping shared resources under public control.

###

August 4th, 2011

Pipe Dreams: What the Gas Industry Doesn’t Want you to Know about Fracking and U.S. Energy Independence

Download the PDF File

Chesapeake Energy Corporation unveils plan to transform U.S. transportation fuels market and reduce OPEC oil imports – News – Daily Review

Chesapeake Energy Corporation unveils plan to transform U.S. transportation fuels market and reduce OPEC oil imports – News – Daily Review.

True Grit: Technically Uneconomic- Natural Gas Edition | The Wilderness Society

True Grit: Technically Uneconomic- Natural Gas Edition | The Wilderness Society.

The Great Natural Gas Export Swindle

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Countdown Contributor Mark Ruffalo on Fracking | Countdown with Keith Olbermann

 Countdown Contributor Mark Ruffalo on Fracking | Countdown with Keith Olbermann.

Chesapeake to Spend $1b on Natural Gas Technology – NYTimes.com

Chesapeake to Spend $1b on Natural Gas Technology – NYTimes.com.

Chesapeake to Spend $1b on Natural Gas Technology–    (If you have a product, create a market–especially if you can get taxpayers to pay for doing it)

Intriguing possibility for Pa.’s excess shale gas | Philadelphia Inquirer | 07/03/2011

Intriguing possibility for Pa.’s excess shale gas | Philadelphia Inquirer | 07/03/2011.

What Keeps Your Utility Company Up At Night | Fast Company

What Keeps Your Utility Company Up At Night | Fast Company.